Fuel cells are considered to be one of the most promising energy technologies for the future, because of their high efficiency and environmental friendliness. Particularly, polymer electrolyte membrane (PEM) fuel cells powered by hydrogen from secure and renewable sources are the ideal solution for non-polluting vehicles. Extensive research and development on all aspects of this technology delivered prototype fuel cell vehicles to streets with impressive performance. However, taking the step towards successful commercialization requires reduction in cost and extension in lifespan of the automotive fuel cells. PEM fuel cells comprise of membrane-electrode assemblies (MEAs), bipolar plates, and gas diffusion layers (GDLs). MEAs in which anode hydrogen oxidation reaction (HOR) and cathode oxygen reduction reaction (ORR) occur to produce electricity play the most crucial role in determining the cost and lifespan of PEM fuel cells. Most HOR and ORR catalysts are based on Pt (in the form of nanoparticles dispersed on carbon black supports), with the high price of this scarce precious metal having a decisive impact on costs. MEA degradation is mainly associated with abnormally high potential locally present on the cathode when hydrogen/air boundary is formed in the anode during startup or shutdown of fuel cell vehicles. The cost and durability issues can be addressed by developing component materials or operation control logic for PEM fuel cells. In this talk, status and challenges of PEM fuel cell technology will be discussed with recent progress in catalyst developments.